RESTAURANT and
QUICK-SERVICE
Developing a Pricing
Strategy that Grows Profits
& Guest Count
Competition is fierce in the multi-billion
dollar Restaurant and Quick-Service
industry. With many new entrants to the
category, it’s essential that organizations
understand their value proposition and
customer willingness-to-pay. With pricing so
closely tied to the bottom line, it plays a key
role in any restaurant’s success.
One chain partnered with Pricing Solutions
to re-gain control of its pricing. Pricing had
grown to include deep discounting and large
featured-item menus but it was not clear
what impact they had on long-term success
and profitability. A focused, concentrated
effort on pricing was needed to reset the
pricing strategy so that it was
complementing rather than undermining the
brand’s price/value image.
The Challenge assessment, Pricing Solutions would Building Strategy &
In a crowded market, the company’s pricing determine if the client was in a value Management Capabilities: In
advantaged or disadvantaged position, the final project phase, Pricing
was veering out of control. Pricing had
and why. Solutions utilized the analytics and
become reactive. The concern grew around
its pricing strategy framework to
wide-spread discounting. The restaurant Leveraging Analytics: Pricing develop a robust and sustainable
chain had experimented with price cuts in an Solutions’ analyzed the client’s past 2 pricing strategy that would get the
effort to boost customer traffic. While years of POS data to compute price- client’s business back on track. It
discounting proved addictive, margins were elasticity and build a Price Simulator. The also involved making changes to
declining. It was difficult to consistently custom simulator was capable of playing- the client’s pricing infrastructure,
execute any strategy. Like many others in out possible scenarios in the market. including developing its internal
the industry, it lacked the right customer For example the model could forecast pricing staff.
insights to make informed pricing decisions. the impact of price changes on unit sales,
revenue, margin and guest count.
Building a Solution that Fits
The company needed to manage prices
across hundreds of menu items and
restaurant locations. Pricing Solutions
executed a three-phased project to help the
company regain control of pricing and
reinvigorate growth.
Beginning with Pricing Research: The
challenges companies face with pricing
strategy often stem from a lack of
understanding of the 5Cs of pricing .
Customer Research provided insight into
the client’s customers including key value
drivers and the role pricing played in the
purchase decision.
The importance consumers placed on food
quality, restaurant atmosphere and service
compared to pricing, was used to build a
Price-Value Map (PVM). The PVM was an
indicator of the company’s value positioning
versus key competitors. Based on this
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 What’s the Pricing Solutions
The Result?
Difference?
Our Firm
The project was designed to stop the ‘pricing
Our firm believes in a comprehensive Our mission is to dramatically improve clients’
slide’, that is to say, to recover the
approach to your pricing challenges. We profitability and market share through
approximate 5% in annual revenue and
specialize in leveraging research and analytics improved pricing. Pricing Solutions’ four core
margin that was being lost under the client’s
to develop a robust pricing strategy that will services include Pricing Strategy &
initial discounting strategy. It was clear now
succeed in the market place. Our approach in Management, Pricing Research & Analytics,
that discounting was hurting the business.
the restaurant and quick-service industry Pricing Training and Pricing Tools & Systems.
Reducing discounts on inelastic products,
includes an assessment of non-price factors
Known for our World Class Pricing TM
deploying terms and conditions and executing
and other key value drivers. The impact they
methodology, we have grown to become one
price increases surgically were the actions
have on the bottom-line cannot be of the world’s leading pricing consultancies
needed to turnaround to improve annual
overlooked when pricing strategy must align
with offices in North America, Europe, Asia
revenue and margin by an estimated 2-3%.
with corporate strategy.
Pacific and Latin America. Our global team of
researchers, consultants and partners are
“ Discounting is tempting, recognized thought-leaders.
but when used to buy business you run
the risk of undercutting your own value We deliver customized cross-functional
to customers. Get accurate customer solutions, helping our clients achieve a
insights and an assessment typical payback of 10:1 on their investment.
of your Pricing Power. In centre: 5 Cs of
That’s how you’ll grow profitably. ” Pricing; Below: Price Global Headquarters
- Paul Hunt
Simulator estimates 43 Colborne Street, Suit 300
President, Pricing Solutions Ltd.
sales revenue & margin Toronto, ON Canada M5E 1E3
impact of a price change
Tel: 1.416.943.0505
Fax: 1.416.943.0507

© Pricing Solutions Ltd. | pricingsolutions.com